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Jilted IBM takes Sun deal off the table
By Brian Bergstein |
April 7, 2009, Tuesday
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Print Edition
Print Edition
IBM Corp withdrew its offer to buy Sun Microsystems Inc for about US$7 billion this weekend, clouding the prospects for a deal that would shake up the computing industry.
Talks were in their final stages in recent days but IBM took its offer off the table after Sun terminated IBM's status as its exclusive negotiating partner, according to two people familiar with the situation who spoke on condition of anonymity.
But one of them said the two sides were still talking.
IBM was believed to be offering about US$9.50 per share ?? about double the price Sun was trading for when the discussions leaked last month. Sun shares closed last week at US$8.49.
Californian server and software maker Sun was one of the darlings of the dot-com era but spent most of this decade struggling to find its place, wrestling with huge losses and thousands of layoffs. Sun was widely believed to be seeking a buyer and analysts were not surprised to learn of the talks with IBM.
But it does not appear Sun has alternative suitors to IBM, which has server and software technologies that could mesh with Sun's.
People familiar with the talks said the companies were haggling over price and Sun's demand that IBM commit to seeing the deal through expected regulatory scrutiny. Antitrust questions would likely come because IBM and Sun would have about two-thirds of the high-end server market. The combined companies also have about half of the market for machines that store data on tape.
Talks were in their final stages in recent days but IBM took its offer off the table after Sun terminated IBM's status as its exclusive negotiating partner, according to two people familiar with the situation who spoke on condition of anonymity.
But one of them said the two sides were still talking.
IBM was believed to be offering about US$9.50 per share ?? about double the price Sun was trading for when the discussions leaked last month. Sun shares closed last week at US$8.49.
Californian server and software maker Sun was one of the darlings of the dot-com era but spent most of this decade struggling to find its place, wrestling with huge losses and thousands of layoffs. Sun was widely believed to be seeking a buyer and analysts were not surprised to learn of the talks with IBM.
But it does not appear Sun has alternative suitors to IBM, which has server and software technologies that could mesh with Sun's.
People familiar with the talks said the companies were haggling over price and Sun's demand that IBM commit to seeing the deal through expected regulatory scrutiny. Antitrust questions would likely come because IBM and Sun would have about two-thirds of the high-end server market. The combined companies also have about half of the market for machines that store data on tape.
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